A bureaucratic betrayal — in the name of poverty

There are two major centrally-sponsored schemes (CSS) — the Integrated Rural Development Programme (IRDP) and the Jawahar Rozgar Yojana (JRY). In respect of both these schemes the report attempts no review whatsoever. It does not say a word as to the total money spent on them since inception or the extent to which they have succeeded or the reasons for failure.

The report goes straight into what is the administration’s magnificent obsession: the quantum of subsidy. In its very opening para under IRDP, it prescribes that the quantum of subsidy be standardised for all individual beneficiaries at Rs 7,500, while for group ventures the subsidy should continue to be Rs 1.25 lakh or 50 per cent of the project cost. In sharp contrast, it chose to shield its eyes from the glare of some grim facts which should have been part of any credible review. The sums spent for the cause of poverty removal are colossal. They aggregated over Rs 60,000 crore between the Sixth and the Eighth Plan.

Currently the expenditure on all CSS, including IRDP, is about Rs 13,000 crore per annum. Between 1980-81 and 1994-95, IRDP consumed over Rs 45,000 crore (subsidy Rs 15,000 crore and loan Rs 30,000 crore) and assisted about 456 lakh families. Even after ignoring the necessary provision for repayment of interest and capital, only about 12 per cent of the total assisted families had crossed the poverty line up to the end of the Seventh Plan. This poor performance was attributed to inadequate investment per assisted family which was subsequently nearly doubled during the Eighth Plan. But in spite of it the proportion of IRDP-aided families crossing the poverty line increased from 12 per cent to less than 15 per cent. The recovery rate of IRDP loans is average 44 per cent, thus sinking the banks themselves below the poverty line.

The Committee had available to it, had it cared, excellent clues on the required rationalisation offered by at least three major official reports — the Report of the Agricultural Credit Review Committee, 1987 (headed by Prof. A. M. Khusro), Reserve Bank of India; the National Development Council (NDC) Committee, on Employment 1992; and the Mid-Term Appraisal (MTA) of the Eighth Five Year Plan 1992-97, Planning Commission 1996; besides clear directions offered on the subject by the Eighth Plan and the Approach Paper to the Ninth Plan.

The Khusro committee went at length to diagnose IRDP’s poor performance and identified critical remedial steps which were in the main reiterated by successive committees. It held that IRDP’s chronic ailment was that “it was never conceived and operated as an integrated programme of rural development, seeking to secure fuller exploitation of local resource potential and the development of the necessary supportive socio-economic infrastructure, and by thus generating heightened economic growth in the area affording the poor the needed opportunities for wages and self-employment on an ever-growing basis”.

It called for major changes in the concept and practice of IRDP. “First, there must be meaningful village, block and district-level planning to diagnose what activity will be profitably pursued by IRDP participants, at what scale and with what additional services.”

Second, it found that “there were widespread complaints that the subsidy amount was not reaching the beneficiary in full and that a sizable portion of it was being misappropriated by both the Government functionaries and the banks’ officials as also some clever borrowers who merely wanted to pocket the subsidy and some middlemen who worked as touts”.

The NDC Committee and MTA also underscored “the need for a high degree of convergence between the various poverty alleviation programmes, the area development programmes as well as sectoral schemes”.

Defying all this wisdom, the committee recommends that IRDP should continue to be administered in isolation from JRY and other poverty alleviation programmes. It thus shuts the door on these programmes being integrated with or derived from the district plan regarded by each review Committee as being fundamental to the success of IRDP ventures of the poor. The Committee advocates continuation of status quo in respect of the District Rural Development Agencies (DRDA).

With the formation of the elected district zilla panchayats under the authority of the Constitution, the logical step would have been to dissolve the DRDA. We can think of one reason for its clinging on to DRDAs. It is not widely known that 20 per cent of IRDP funds are allowed to be used by DRDA for overheads and marketing infrastructure support. No public report is available on what part of this sum running into thousands of crores has been utilised for marketing and infrastructure support for IRDP aided families. Suspicion is that much of it is being spent to sustain DRDA’s bureaucracy. At the end of the day, the Committee has promoted not the interests of the poor but that of the bureaucracy in Krishi Bhawan and the States.